DirecTV Now increases subscription prices for new streaming video packages with HBO included

AT&T has revamped its DirecTV Now live TV streaming service, increasing monthly subscription prices and dropping some channels, but including HBO in the packages.

New customers will be able to choose from DirecTV Now's Plus and Max packages, priced at $50 and $70, respectively. The Plus package has more than 40 channels including local broadcast networks (ABC, CBS, FOX, NBC, where available), as well as CNN, ESPN, Fox News, FS1, MSNBC, NBCSN, TBS, TNT, USA and HBO. The 50 channels in the Max package include those and ESPNU, FS2, Golf Channel and Cinemax.

The Plus package is priced $10 higher than DirecTV Now's previous entry-level package, the $40 Live A Little deal, which had 60 channels, including A&E, AMC and Discovery Channel and MTV, which are no longer available on any new DirecTV Now package.

Customers can keep current package for $10 more

Current customers who want to keep the $40 package – or other previous offers such as the $55 Just Right package – that have those channels can continue to do so, but their bills will increase by $10 beginning April 12.

This is just the latest synergistic strategy move by AT&T, which two weeks ago saw its merger with CNN and HBO parent Time Warner upheld by a federal appeals court. In June, AT&T launched WatchTV, a so-called “skinny bundle” with more than 30 live streamed channels and thousands of TV shows and movies on demand, free for some of AT&T's unlimited wireless customers or $15 monthly for others including non-AT&T consumers.

AT&T also plans to launch a new subscription service later this year, as does Disney. Also apparently eyeing the market is Apple, which has long been rumored to be planning a streaming content offering. The tech company has a March 25 event scheduled, and Apple is talking with AT&T, CBS and other content providers to lineup HBO, Showtime and other channels for its service, Bloomberg reported Wednesday, citing persons familiar with the situation.

A sign that AT&T might be worried about the price increases? The parent company is increasing its DirecTV Now free trial period from one week to one month "to woo new customers to give the service a try," said Phil Swann, publisher of The TV Answer Man news site.

He notes that AT&T lost 267,000 subscribers to the service in the fourth quarter of 2018; DirecTV Now has 1.6 million subscribers, AT&T said in its fourth quarter financial report, released Jan. 30.

Repercussions likely from AT&T's DirecTV Now changes

With the restructuring of DirecTV Now's programming choices, AT&T's "strategy seems clear. It is using HBO as its differentiator, and becoming profitable," Todd Juenger, senior analyst with investment firm Sanford Bernstein, said in a note to investors Wednesday.

By dropping some channels – and the fees for carrying those networks – and including HBO, AT&T has a more profitable business, he says.

The move could set off a fight among other broadband subscription TV services such as Hulu and YouTube TV for exiting DirecTV now customers, Juenger said. Or it could lead other services to pare down their channels, too.

"Over time, the day of reckoning is inevitable," he said. "Even (YouTube parent) Google can't keep selling a product to consumers for less than it costs to acquire, forever. Either the price has to go up, or channel lineup down, or both. (DirecTV Now) has confirmed what we already knew about which networks will be the biggest victims."